99-23124 RESO
RESOLUTION NO.
99-23124
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, DIRECTING THE CITY
MANAGER TO TERMINATE THE CONTRACT FOR SALE AND
PURCHASE, EXECUTED PURSUANT TO THE CITY'S OPTION TO
PURCHASE THE ALASKA PARCEL, AS PROVIDED IN THE
SETTLEMENT AGREEMENT AMONG THE CITY OF MIAMI
BEACH, THE MIAMI BEACH REDEVELOPMENT AGENCY AND
WEST SIDE PARTNERS, LTD.
WHEREAS, the Settlement Agreement among the City of Miami Beach, the Miami Beach
Redevelopment Agency and West Side Partners, Ltd, gave the City an option to purchase the Alaska
Parcel that expired on January 13, 1999; and
WHEREAS, on January 6, 1999, the City Commission authorized the City Manager to
exercise the City's option to purchase the Alaska Parcel; and
WHEREAS, Final Approvals were granted on March 1, 1999; and
WHEREAS, a Contract for Sale and Purchase was executed on March 10, 1999; and
WHEREAS, the City may terminate the Contract for Sale and Purchase prior to the
expiration ofthe Due Diligence period, which is 45 days after the date of execution of the Contract
for Sale and Purchase; and
WHEREAS, the Administration has been unable to secure funding for said acquisition
within the allotted timeframe; and
WHEREAS, based on the February 17, 1999 status report to the City Commission, the
Administration is seeking final direction to terminate the Contract for Sale and Purchase.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, directing the City Manager
to terminate the Contract for Sale and Purchase, executed pursuant to the City's Option to Purchase
the Alaska Parcel, as provided in the Settlement Agreement among the City of Miami Beach, the
Miami Beach Redevelopment Agency and West Side Partners, Ltd.
PASSED AND ADOPTED this 14thday of April , 1999.
ATTEST:
-i4k~ rOvt~
CITY CLERK
~Af
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
T, \AGENDA\1999\APR1499\REGULAR\ALASKA-R 12/28/98.1
MAYOR
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ATTACHMENT 1
ALASKA PARCEL FACTS
Below, please find the pertinent facts regarding the Alaska Parcel.
. Settlement Price: $ 7,200,000.00
$ 2,117,647.00/Acre
$ 48.61/Sq. Ft.
Option Period Expires: January 13, 1999
. Lot size 148,104 Sq. Ft. or 3.4 Acres
. Assessed Value $ 4,444,120.00
. Taxes $ 115,537.16
. Last Purchase Price-May 1994 $ 6,000,000.00
. Marine Recreational zoning permits .25 FAR = 37,505 buildable Sq. Ft.
APPRAISAL
On January 6, 1999, the City Commission authorized the execution ofthe option subject to a proffer
by Robert W. Christoph to provide the $250,000 deposit and to procure an appraisal. Unbeknownst
to the Administration at this meeting, the City Attorney's Office had ordered an appraisalily P B.
Alhale & Associates, Inc. of the subject site in connection with a Bert J. Harris claim which
established the following values:
.
Market value of fee simple interest with
a base F.A.R. of .25, with additional design
bonus scenario as of January 20, 1998:
$6,375,000
.
Market value of fee simple interest with
a base F.A.R. of .25, without additional
design bonus as of November 24,1998:
$4,125,000
. Appraisal as of Jan. 1, 1995
MR zoning with design bonuses:
$4,443,000
.
CPS-4 zoning:
$6,665,000
As a result of the recent appraisal procured, the City did not procure an additional appraisal paid by
Robert W. Christoph.
ESTIMATE OF IMPROVEMENTS FOR ALASKA PARCEL
City staff has researched and provided a rough breakdown of proposed improvements to the site with
the associated estimated costs:
11,100 sq. ft. of 18 ft. wide 6" concrete sidewalk
12 pedestrian light poles with bases
135,000 sq. ft. of topsoil, sod and irrigation
50 coconut palms
535 linear feet of bulkhead improvements
(Remove deteriorated portion and replace
with concrete rip rap bags.)
$ 55,500
36,000
270,000
25,000
$135.000*
Total
$521,500
*The Hinson bulkhead is estimated to cost an additional $90,000 and such improvements would be
required to connect the Baywalk from SSDI-South to the Alaska Parcel.
ENVIRONMENT AL REPORTS RELATED TO THE ALASKA PARCEL
The City of Miami Beach has reviewed the following environmental reports:
1. Storage Tank Closure Assessment Report of the City of Miami Beach Federal Triangle
prepared for East Coastline Development, Ltd., dated October 1995.
2. Report of Phase I Environmental Property Assessment of Cook Inlet Parcel for Azure Coast
Development Ltd. dated July 1993.
3. Report of Supplemental Phase II Environmental Property Assessment of Cook Inlet Parcel
for Azure Coast Development, Ltd. dated September 1993.
The reports in the City's possession detail a historical and physical review of the Alaska Parcel
(a.k.a. Cook Inlet) and the adjacent properties, including the Federal Triangle, Goodman Terrace and
the Hinson parcel. (Refer to Attachment "C".) The reports identify the historical presence of a boat
house and fuel docks on the western shoreline as the only issue of environmental concern at the
subject site. Follow-up investigations revealed the presence of three abandoned underground fuel
storage tanks near the former boat house.
The tanks were properly excavated and removed. A small amount of contaminated soil was also
excavated and disposed of. The DERM conducted an inspection, reviewed the Tank Closure Report
filed by Nutting Environmental and issued a No Further Action approval for the site. With the
resolution of the abandoned tank issue, the property was given an environmental "clean bill of
health. "
:..
The only pending environmental concern relates to potential impacts to the site that might have
occurred in the past few years while the site was being used as a construction staging area for the
Porto fino Tower project. The City has requested bids from three companies to update the existing
environmental audit records. To date, one bid has been received for $1,000.
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~ITY OF MIAMI BEACH
;ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
lttp:\\cLm iam i-beach. fl. us
COMMISSION MEMORANDUM NO. ;z, G:, q - q 9
TO:
Mayor Neisen O. Kasdin and
Members of the City Co
DATE: April 14, 1999
FROM:
Sergio Rodriguez
City Manager
SUBJECT:
A RESOLU ON OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, DIRECTING THE CITY MANAGER
TO TERMINATE THE CONTRACT FOR SALE AND PURCHASE,
EXECUTED PURSUANT TO THE CITY'S OPTION TO PURCHASE THE
ALASKA PARCEL, AS PROVIDED IN THE SETTLEMENT AGREEMENT
AMONG THE CITY OF MIAMI BEACH, THE MIAMI BEACH
REDEVELOPMENT AGENCY AND WEST SIDE PARTNERS, LTD.
BACKGROUND
On January 6, 1999, the City Commission authorized the City Manager to exercise the City's option
to purchase the Alaska Parcel, as provided in the Settlement Agreement among the City of Miami
Beach, the Miami Beach Redevelopment Agency (RDA) and West Side Partners, Ltd., subject to
certain conditions. The City Commission approval was based upon a proffer by Robert W.
Christoph to: 1) provide the $250,000 deposit required pursuant to the Contract for Sale and
Purchase, and 2) to procure an appraisal of the subject site. On February 17,1999, the City
Commission requested a final report and that final Commission direction be authorized prior to the
expiration of the Due Diligence period.
STATUS
Pursuant to the terms of the Settlement Agreement, the City's option to purchase the Alaska Parcel
required Commission approval prior to January 13, 1999. (Such approval was granted on January
6, 1999.) Final approvals, as defined in the Settlement Agreement, were granted on March 1, 1999.
As a result, the Contract for Sale and Purchase was executed on March 10, 1999 and the 45-day Due
Diligence period expires on April 24, 1999. (Refer to Exhibit 1.)
In connection with the execution of the Contract for Sale and Purchase, the City concurrently
executed an "Agreement and Escrow Instructions" between Robert W. Christoph and the City of
Miami Beach to effectuate the $250,000 deposit and, simultaneously, issued a letter terminating the
Contract for Sale and Purchase, which is held in escrow. ::
AGENDA ITEM ~ l C
DATE ~ J~ <1~
Page NO.1
ACTIONS TO DATE
December 10,1998: South Pointe Advisory Board adopted motion to recommend approval to
exercise the option to purchase the Alaska Parcel and recommended that all
potential sources of funding be evaluated.
January 6,1999: City Commission authorizes the City Manager to exercise option subject to
certain conditions.
January 14, 1999: South Pointe Advisory Board Meeting discusses the acquisition of Alaska
Parcel and report on Commission action.
January 18, 1999: South Pointe and Porto fino Towers Condo Associations Meeting to discuss
potential acquisition of the Alaska Parcel and feasibility of a special
assessment district.
January 27, 1999: South Pointe Advisory Board special meeting to discuss status of Alaska
Parcel acquisition and adopted motion to continue to pursue acquisition of
Alaska Parcel and all possible funding options.
February 1, 1999: City submits Environmentally Endangered Lands (EEL) grant application.
February 3, 1999: City Commission retroactively authorizes submission of EEL Grant
Application and adopted motion to request a Right of First Refusal for the
purchase of Alaska Parcel.
February 9, 1999: Settlement Agreement is entered into between Gil Zriny and West Side
Partners, Ltd.
February 10, 1999: South Pointe and Porto fino Towers Condo Associations meeting to further
discuss the establishment of a special assessment district. A petition is being
circulated in favor of the acquisition and will be presented by the
Associations at the City Commission meeting.
February 17, 1999: Status Report to the City Commission requesting a final report be delivered.
March 24, 1999: South Florida Regional Planning Council meeting regarding Florida
Communities Trust's Preservation 2000 Program.
March 30, 1999: Meeting with Jerrold Blair and Ernst Rosenkrantz to discuss alternative
funding strategy. Potential acquisition sources identified are as follows:
Purchase Price
Preservation 2000 Grant Proceeds
Special Assessment
Balance to be Funded
$7.2 million
.. 2.2 million
3.5 million
$1.5 million*
*$1.5 million balance could be funded from EEL Grant or CARL funds.
Page No.2
ANALYSIS
An attachment to this memorandum details:
. Alaska Parcel property facts
. Appraisal values
. Estimated cost of improvements
Environmental summary
As described in the February 17,1999 status report, although the Settlement price is in excess of the
1995 and 1998 appraised values, there are several reasons why the Administration recommended in
favor of exercising the option to purchase the Alaska Parcel.
. There is added value in maintaining the Alaska Parcel open to the public.
. The City wants to ensure this property is maintained as open space.
. The City may not have the opportunity to purchase the Alaska Parcel again.
. Pursuant to the Settlement Agreement and the Contract for Sale and Purchase attached
thereto, the City has 45 days from the date of the Contract for Sale and Purchase to review
all records, reports and documents regarding the Alaska Parcel. During this Due Diligence
Period, the City can give written notice of termination of the Purchase and Sale Agreement
and deposit with interest will be reimbursed to the City. Therefore, there was no risk to
the City to exercise the option during the 45-day period, thereby affording the City the
opportunity to explore all possible funding sources,
. Alternatively, if the City were to acquire the Alaska Parcel through eminent domain, the
City's historical experience has evidenced valuations resulting in purchase prices in excess
of 180% of appraised value, plus set legal fees for the property owner. Based on this
historical experience and the November 24, 1998 appraised value of $4,125,000,
condemnation would result in an estimated acquisition price in excess of$7.4 million plus
legal fees.
. Furthermore, a Bert J. Harris claim has been filed by the property owner for the Alaska
Parcel as a result of the zoning change that reduced the FAR for this site from .75 with
design bonuses to .25 by eliminating all design bonuses. As reflected above, the City of
Miami Beach obtained an appraisal based on .75 FAR at a price of$6,375,000. The property
owner may obtain an even higher appraisal and, should the property owner prevail in court,
the City of Miami Beach might have to pay the owner for the loss of property value and not
gain title to the site; therefore, enabling private development.
RIGHT OF FIRST REFUSAL
The Administration has advised the Porto fino group of the City's desire to obtain a Right of First
Refusal to purchase the Alaska Parcel. The Porto fino group has indicated that there are currently
two parties interested in acquiring the Alaska Parcel and granting a Right of First Refusal may limit
those ongoing negotiations. Furthermore, Portofino has indicated that if a Right of First refusal is
granted, they would seek to recoup their carrying costs estimated at apPlOximately $25,000/month.
On February 16, 1999, Porto fino declined the City's request for a Right of First Refusal.
Page No.3
FUNDING ALTERNATIVES
Grants
On February 1, 1999, the City submitted an application to Miami-Dade County DERM to receive
funding for the acquisition of the Alaska Parcel through the Environmentally Endangered Lands
Program. The results of this application will be received in September, 1999.
The City Administration has also submitted a grant application, on February 8, 1999, to the
Conservation and Recreation Lands Program (CARL) through the Department of Environmental
Protection, State of Florida.
The Administration is also preparing a grant application for the Florida Communities Trust
Preservation 2000 Program through the Department of Community Affairs, State of Florida, which
is due June 2, 1999. Maximum allocation is $2.2 million.
It is anticipated that grant funding notifications will not be received until the Fall of 1999 and as
such, funds will not be available prior to the expiration of the Due Diligence period. The
Administration recommends that we continue to pursue grant funds for said acquisition irrespective
of the termination of the Contract for Sale and Purchase.
FINANCING ALTERNATIVES
The City's financing alternatives remain as previously reported:
Potential Financing Sources:
1) Trust for Public Land: Green Cities Initiative - Interim acquisition financing
2) Special Assessment District - Must allocate based on direct and proportionate special benefit
3) Sunshine State Bond Pool-
A. Pledge - covenant to budget and appropriate from any Non-Ad Valorem
revenue source within the Government Unit;
B. Term - twenty years;
C. Interest rate - Variable; based on the City's pro-rata share of the loan pool's debt.
4) Tax Increment Funds
5) General Obligation Bond
The only funding alternative the City can access within the allotted timeframes set forth in the
Contract for Sale and Purchase, is to finance the acquisition through the Sunshine State Loan Pool.
Repayment of said loan could be provided through the establishment of a special assessment district,
the award of grant funds, payment from tax increment funds, and/or a combination thereof.
Page No.4
Special Assessment District
As previously reported, the South Pointe and Porto fino Condo Associations continue to support the
establishment of a special assessment district and to impose such an assessment. The time frame to
establish such a district is estimated to take, at a minimum, approximately 90 days. Proceeds from
a special assessment, coupled with receipt of grant funds, would represent a significant portion of
the Alaska Parcel's purchase price, as described previously (March 30, 1999 Actions to Date).
CONCLUSION
The Administration recognizes and has previously highlighted the benefits of acquiring the Alaska
Parcel. Diligent efforts have been made to pursue all potential grant funding sources and to meet
with area residents to solicit input and support for the proposed acquisition. Staff feels confident that
proceeds from a special assessment, estimated at $3.5 million, and Preservation 2000 grant funds,
estimated at $2.2 million, can contribute towards 80% of the purchase price. The balance of the
purchase price, $1.5 million, can be obtained through additional grant proceeds (i.e., EEL Grant, Carl
Funds, etc.) or through other funding sources.
To date, the residents have not provided a firm funding commitment. However, Robert W.
Christoff, during a meeting with the Mayor on AprilS, 1999, offered to contribute $125,000 should
the purchase go forward. This contribution represents 50% of the "at-risk" security deposit needed
to proceed beyond the Due Diligence period. Other residents have been contacted to see if similar
commitments can be obtained. No official response has been received as of the date this report was
written.
Due to the lack of identified and committed funding sources to complete the acquisition at this time,
and the Commission's previous direction to not place City funding at risk, it is recommended that
the City terminate the Contract for Sale and Purchase at this time. As depicted in Exhibit 1, the City
has the option to proceed with the Contract for Sale and Purchase and extend the closing date, by
placing the $250,000 deposit "at risk." Such extensions would carry the contract period to early
September 1999, at which time grant funding options would be more readily determined. This
option has been discussed with residents in the area. However, without firm acquisition funding,
no commitment has been received to provide the total $250,000 "at risk" deposit, thereby resulting
in a recommendation to terminate the contract.
RECOMMENDATION
It is recommended that the Commission adopt the attached Resolution directing the City Manager
to terminate the Contract for Sale and Purchase of the Alaska Parcel.
~ .
SR:CMC/jph
Attachments
T:\AGENDA \ I 999\APR1499\REGULAR\ALASKA. WPD
Page No.5